Newcore acquires trio of social infrastructure assets
Newcore Capital has acquired two education buildings in Cambridge and Oxford and a food distribution centre in Colchester.
The investment manager paid £11m for the assets, reflecting a net initial yield of 6.1%.
The OxCam acquisitions were made on behalf of Newcore’s longstanding core-plus separate accounts and provide 600 education places in the university cities. Both sites are fully let to Aspect International Language Academy, which is trading as Kaplan International.
Newcore Capital has acquired two education buildings in Cambridge and Oxford and a food distribution centre in Colchester.
The investment manager paid £11m for the assets, reflecting a net initial yield of 6.1%.
The OxCam acquisitions were made on behalf of Newcore’s longstanding core-plus separate accounts and provide 600 education places in the university cities. Both sites are fully let to Aspect International Language Academy, which is trading as Kaplan International.
Newcore has also acquired a food distribution centre in Gosbecks Road, Colchester, on behalf of its latest value-add fund, the Newcore Strategic Situations V, which closed in May 2023 having raised £190m in equity commitments. Support for the fund included the Merseyside and Clwyd local government pension schemes.
NSS V remains active in the market for educational properties as well as other social infrastructure assets, including waste, open storage, healthcare and veterinary.
In October last year, Newcore also launched the Newcore Sustainable Income Trust, targeting £375m in equity commitments. The fund focuses on acquisitions with “sustainable long-term uses and affordable rental levels”, targeting annual returns of 9-11% with a 5% annual dividend. It is semi-open ended, with structured liquidity flows for primary redemption and new capital raising.
Harry Savory, chief investment officer of Newcore Capital, said: “Owing to their low passing rents and the underlying societal need for the services that they enable, these three properties are expected to perform strongly on a long-term risk-adjusted basis.
“The properties in Cambridge and Oxford would sustain a wide range of educational uses, including childcare and special educational needs, if the current tenant ever chose to vacate. Colchester is an important hub for food distribution – an increasingly important societal trend and, therefore, a sector of interest to Newcore.”
[caption id="attachment_1215694" align="alignnone" width="1193"] Newcore’s food distribution centre in Colchester[/caption]
Hugo Llewelyn, chief executive of Newcore Capital, said: “Our purchases are always very conscious of the wider societal shifts taking place in social infrastructure provision across the UK, as increasingly stretched government resources create significant opportunity for private investment in the sector.
“They are similarly conscious of minimising risk to the highest extent for us, our tenants, and investors. Market conditions, though bleak overall, have created a fantastic window of opportunity to satisfy this requirement through the availability of social infrastructure real estate entailing resilient demand fundamentals at highly attractive discounts.”
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